Sustainability’s Return on Investment
As COP27 starts in Sharm el-Sheikh on the Red Sea, Net Zero goals will take center stage. A company’s ability to set and exceed its Net Zero targets will be critical to reducing the risks of climate change. But if we take a closer look at what’s happening behind the scenes, the public at large will begin to see through these corporate press releases and demand transparent and thoughtful solutions.
According to Accenture, only 34% of the world’s largest companies have publicly stated net zero targets. Of those companies with Net Zero commitments, 93% will fail to meet their targets unless they significantly accelerate progress. A company’s inability to reach their publicly committed sustainability goals will continue to be a pain point for executives and sustainability groups through 2030 and beyond.
1. Why it Matters
If we fail to hold global temperatures to 2°C above pre-industrial levels, the increase of severe climate events will continue to present serious business risks to companies of all industries. If we continue on the path we are on, it is estimated that 420 million people will be exposed to record heat and have their livelihoods disrupted by higher seas. Leading to 3 in 10 companies already noticing the operational impacts of these climate-related disasters, such as damage to their facilities and disruption of their workforce.
These challenges will halt global supply chains, they will increase insurance costs for companies of all industries, and they’ll force governments around the world to enact costly regulatory measures.
2. Strengthening Your Base
The process of integrating sustainability to the core of your business to get ahead of these environmental and economic challenges starts by building strong stakeholder relationships.
65% of employees believe companies should be responsible for leaving their people “net better off” through their work.
66% of consumers plan to make more sustainable or ethical purchases over the next six months.
81% of sustainable indices outperform their peer benchmarks in 2020.
These three key stakeholders make up the core of a company’s identity. These relationships are strengthened by how a company generates year-over-year growth by reducing costly employee turnover, how a company increases sales from a new generation of young professionals voting with their wallets, and how a company continues to generate alpha for its investors through strategic investments making their business more sustainable.
3. Becoming an Industry Leader
It's beneficial to learn from international companies that have become environmental leaders. Here are three ways you can join this exclusive group and start integrating sustainability into your company.
Bolstering your value chain collaborations by partnering with international NGOs
Setting sophisticated short and long-term Net Zero targets
Develop clear risk mitigation strategies to lessen disruptions to their core business functions.
4. The Solution
A company’s first step to become part of the exclusive group of international companies that will meet their Net Zero and sustainability targets is to develop a balanced portfolio of public-private partnerships. This begins by incorporating grants and community Investments intended to address strategic priorities where a company does business around the world. At Philanthrofi, we help companies partner with governments, foundations, NGOs, and other companies to help support communities where they operate key business functions. We focus on community and business needs such as the environment, economic development, and public health, and we consider each community's development goals when deciding how best to advise the allocation of funding.
If you work for a company looking to become part of the 7% of organizations globally that exceed their Net Zero goals, tap here to continue the conversation.
